Saturday, March 5, 2016

In the first of two analyses, Crichton, along with Elias and Ala'a Alkerwi, an epidemiologist at the Luxembourg Institute of Health, compared the mean scores on various cognitive tests of participants who reported eating chocolate less than once a week and those who reported eating it at least once a week. They found "significant positive associations" between chocolate intake and cognitive performance, associations which held even after adjusting for various variables that might have skewed the results, including age, education, cardiovascular risk factors, and dietary habits.

In scientific terms, eating chocolate was significantly associated with superior "visual-spatial memory and [organization], working memory, scanning and tracking, abstract reasoning, and the mini-mental state examination."

But as Crichton explained, these functions translate to every day tasks, "such as remembering a phone number, or your shopping list, or being able to do two things at once, like talking and driving at the same time."

After a tepid start to 2016, February’s jobs data indicated that the U.S. economy is back in action, with solid jobs gains likely to quell recession concerns

Stupid Whitey.

WSJ RTE - also, wages are actually going up faster than you think. Y'know, with that and with the sudden popularity of improvements to the minimum wage, the US might be setting itself up for 5-10 more years of solid growth. Unless, of course, the Fed decides to stomp on the throat of the working class.

Louisiana stands at the brink of economic disaster. Without sharp and painful tax increases in the coming weeks, the government will cease to offer many of its vital services, including education opportunities and certain programs for the needy. A few universities will shut down and declare bankruptcy. Graduations will be canceled. Students will lose scholarships. Select hospitals will close. Patients will lose funding for treatment of disabilities. Some reports of child abuse will go uninvestigated.

There you go. Yet another haven of right-wing paleo-conservative Nazi derp that was only able to survive due to high oil prices, where the people are suddenly learning that being born over a pile of 300-million-year-old kelp doesn't mean that you're smarter or that your idiotic fantasy "economics" is true.

Friday, March 4, 2016

Chris Dillow - barriers to productivity growth. I have no clue why New Institutional Economics is considered "heterodox", because this is all just common sense and even the two-bit philosophers of the 19th century who "invented" economics should have managed to incorporate it into their sophistic arguments:

“The limits to productivity growth are set only by the limits to human inventiveness” says John Kay. This understates the problem. There are other limits. I’d mention two which I think are under-rated.

One is competition. Of course, this tends to increase productivity in many ways. But it has a downside. The fear of competition from future new technologies can inhibit investment today: no firm will spend £10m on robots if they fear a rival will buy better ones for £5m soon afterwards. As someone said, it is the second mouse that gets the cheese. It might be no accident that techno-optimism exists today alongside low investment, weak stock markets and high corporate cash piles.

The second is that, as Brynjolfsson and MacAfee say, "significant organizational innovation is required to capture the full benefit of…technologies."

For example, Paul David has described (pdf) how the introduction of electricity into American factories did not immediately raise productivity much, simply because it merely replaced steam engines. It was only when bosses realized that electric motors allowed factories to be reorganized – dispensing with the need for machines to be close to a central power source – that productivity soared, as workflow improved and new cheaper buildings could be used. This took many years.

It's not just organizational change that's needed, though. So too, sometimes, is social change. For example, household appliances such as vacuum cleaners and washing machines have allowed women to join the labour market. But it is taking decades to reap this benefit, because it also requires a change in social norms to accept women as workers of equal potential.

Similarly, I suspect that if IT is to have (further?) productivity-enhancing effects, they require socio-organizational change. IT should make it easier to communicate knowledge, but this only raises productivity if it is accompanied by a breaking down of silos and methods to facilitate co-operation and the exchnage of ideas within companies. It also should facilitate working from home, which could increase aggregate productivity by reducing house prices thus shifting spending away from a sclerotic sector of the economy towards more dynamic ones.

Without these changes, the internet might be like Hero of Alexandria’s aeolipile – an impressive device of little macroeconomic consequence.

However, there are always obstacles to the social and organizational change necessary for technical change to lead to productivity gains. These might be cognitive – such as the Frankenstein syndrome or “not invented here” mentality. Or they can be material. Socio-technical change is a process of creative destruction, the losers from which kick up a stink; think of taxi-drivers protesting against Uber.

Worse still, these losers aren’t always politically weak Ludditites. They can be well-connected bosses of incumbent firms, or managers seeking to maintain their power base.

Posted with links because I'm going to read this tonight to make up for not getting a real economics education in university.

For me to be confident that this slowdown was ending, I would want to see new orders spike to at least 54. They didn't do that. That doesn't mean that I expect things to get worse. In fact there are encouraging signs in things like steel production and rial shipments that we may have bottomed. The failure of new orders to pick up means at least that we aren't out of the woods yet.

Ain't it nice when someone else follows the economy for you? That is, ain't it nice when someone who has some clue what he's talking about follows the economy for you?

What’s going on? Basically, “morning in euroland” — such as it was — reflected one-time developments that are now in the rear-view mirror.

First, there was the stabilization of financial markets after Draghi’s “whatever it takes”.

Then there was the end of ever-intensifying austerity, removing a big drag on growth[.]

Finally, there was a boost from the weakening of the euro (which I would attribute to market perception that Europe will stay weak indefinitely)[.]

All that is now past, so Europe can return to its normal state, which sure looks like secular stagnation.

Basically, what he's saying is that any uptick you ever saw in Europe this past year was little more than a snapback from policy-induced collapse.

der Spargel - German budget battle begins over refugees. The article authors obviously know more about economics than Wolfgang Schauble, because they understand that spending on refugee integration is an investment in future growth, and it's eminently affordable when Germany can borrow at negative real rates; while Schauble feels he has to fund settlement (wait for it) through (wait for it) cutbacks in the rest of the budget (really no surprise there, was it).

He seems to feel iron, nickel and zinc have interesting bottomy charts right now, and heck gold has managed to avoid a breakdown and zoomed up.

This reminds me of a post a few months ago, maybe by New Deal Demoncrat, where it was noted that the second half of a secular bull market sees prices of base materials go up, as a result of a upward demand trend in developed markets taking up production slack (as opposed to emerging markets demand, which drove the last commodity cycle; EMs typically suffer financial crises at this point in the EM/DM equity cycle).

It also should mean silver finally begins to not suck.

It's also an interesting possible indicator of a local top in the USD.

All this is also interesting from a US Fed policy standpoint: a local top in the USD means Lael Brainerd will see the deflationary effect of a stronger USD receding, thus she'll be in favour of tightening.

Inflation in the metals will also pass through into the broader US economy, which will also be in tightening's favour.

Ultimately that ends in a Fed-induced recession when they tighten too far, but that's a few years off. And in any case you shouldn't expect a 50% collapse in the S&P when that happens, because a Fed-induced recession is nothing like a bank failure crisis.

Thursday, March 3, 2016

Instead of commentary on the market, which is in set-and-forget mode right now (except for miners, which inscrutably have broken out to new highs, go figger), here's two thoughts on Donald Trump.

1. Why the fuck should he have had any opinion on David Duke when he was being interviewed? Have you heard of David Duke? He's a fucking clown with a website somewhere. He's not even particularly competent at being a neo-Nazi. The only people who've heard of David Duke are AntiFa losers who live in squats and spend their spare time pamphleteering for veganism. Donald should have gone with his gut instinct when asked, and said "who's David Duke? Never heard of him."

Seriously, it's like asking William F. Buckley Jr. for his opinion of the guy from Duck Dynasty who people don't like.

The only clowns who are getting worked up over Trump's Duke thing are people who like attacking Trump anyway, and people who would never vote Republican to begin with. Seriously, I guarantee you half the "journalists" talking about this had to google Duke to figure out who he even was.

2. Ooh, so Romney blasted Trump, eh? Trump's responses put that to rest right away: "Romney is a two-time loser, who cares" and "oh look, it's the Washington establishment trying to fight back, isn't that cute". Really, what the fuck did Romney think he was going to accomplish? What an idiot.

BI - Germany is Europe's biggest problem. With the caveat that this is typical idiotic Business Insider gloomery, and I'm only linking so I can criticize the Germans for their pig ignorance of economics, quote:

And at the heart of the looming issue for Germany and Europe is the Italian banking system.

Problems in Italian banks will "spill over into the Netherlands," Friedman said. "It's going to spill over into Germany. Germany is the new PIIG. Germany depends on exports, and its markets are drying up."

What? You mean it's not a sign of virtue and moral superiority to destroy your neighbours' economies, or a sign of cleverness to devalue your internal economy through labour repression to maximize exports at the cost of the rest of the EU?

Friedman believes that the problems in the Italian banking system will take Germany — the strongest economy in the eurozone — down with it.

What? You mean the Germans don't understand that running a massive trade surplus within the EU destroys the peripheral economies, and when you destroy economies you also render their banking systems insolvent? Didn't Schauble get a B+ in Intermediate Macroeconomics in university? You're saying he didn't know this was going to happen? So, you're saying he's a clueless idiot, then? A clueless idiot who thinks he's a genius, exactly like your typical German?

For example, Germany's largest bank, Deutsche Bank, has an enormous amount of exposure to Italy, and so does the rest of Europe. Friedman thinks it will ultimately be Germany that has to save Italy.

And that will cost a lot of money.

Ha ha ha! No. Germany won't save Italy. Germany will force Italian depositors to get bailed in on a forced recap. The question is whether the Italians finally grow the balls to take back the Eurozone.

Germany will, however, bail out Deutsche Bank with taxpayers' money, because Deutsche Bank controls the CDU. And that will cost a lot of money.

Wake up Belgium, Holland, Denmark, Finland: your banking systems are next. And then you'll learn the price of arrogance.

Ford skyrockets today on record auto sales, but the fact is it had already broken above its SMA(50) earlier, and since Ford is an automaker, and automaker stocks are harbingers of recession sentiment, I guess we can say that the market is done with 1950 and this "downward sloping SMA(50) resistance" bullshit for a while.

I wonder if there's something that's been bought heavily recently, y'know, as a downside protection or a diversification for recession, that can be shorted right now? Y'know, like maybe some company that produces some sort of yellow metal, or something? Especially if there's some sort of curse that happens at this time of year that tanks these sorts of stocks anyway? Y'know, like sort of this weekend?

Monday, February 29, 2016

Supposedly a crippling snowstorm is coming on Tuesday, and after that the pole of cold over Hudson Bay is going to get dragged down onto us in Ontario. But after that, next week's forecast is spring. Hooray!

Here's some news:

New Deal Demoncrat - weekly indicators. Tax withholding and Real M1 are major red flags, while the industrial side of the economy is turning positive.

Tim Duy the science guy - Fed doves still have the upper hand in March. I wonder if he read my post mocking him for piddling his panties over a 10% drop in the S&P? Cuz now he's even considering an accelerated tightening schedule!

Gavyn Davies - global slowdown spreads to the EZ. Gavyn's piddling his panties because he's ignoring his own note that the EZ economy lags the US by a few months. Well, if it gets bad enough, maybe the ignorant German leadership will allow for some tiny smidgen of stimulus to keep the ravenous proletariat happy.

More needs to be done, the communiqué said, to boost growth, including meeting a goal to boost global output by an additional 2% by 2018.

when paired with

Reinforcing economic growth is going to require “all policy tools–monetary, fiscal and structural–individually and collectively,” the group’s statement said. The prescription suggested a lack of unanimity over calls by the IMF and others for a coordinated surge in fiscal spending to make up for the flagging effectiveness of lower interest rates. The communiqué acknowledged that “monetary policy alone cannot lead to balanced growth.”

because you damn well know it means Schauble is still throwing a hissy fit about demands for fiscal expansion to counter a fall into a worldwide lost decade.I wonder if any of these clowns realize how significant fiscal expansion would be, after almost a decade of austerity?

Now that the panty-piddling seems to be over, there are deals aplenty for more conservative investors who want to load up on granny stocks.

For example, BMO yields 4.42%. Oh and they raise their quarterly dividend by 2 cents twice a year.

Royal Bank yields 4.71%. Oh and they also raise their quarterly dividend by 2 cents twice a year.

TD yields 4.2%. Not so regular at raising their dividends though.

I like TD's customer service the best, by the way: when I was trying to wrap up my sister's affairs after she died, the person at the TD branch was unbelievably helpful. It wasn't the typical obstructionist box-ticking nonsense that you get at other utilities (like Cogeco, who were such utter cunts that they literally wouldn't allow me to end her cable service despite her being dead).

So anyway, you tell me why you wouldn't want to own a Canadian bank stock yielding over 4%, considering they have made steady profits for the past 30 years.